AB1038: Bill Text

AB1038,10,23 (9) Bar. Actions that bar disclaimer are as provided in s. 854.13 (11g).

AB1038,10,25 (10) Effect of disclaimer or waiver. The effect of the disclaimer on the disclaimant and any successors in interest is as provided in s. 854.13 (11p).

AB1038,11,3 (11) Nonexclusiveness of remedy. (a) This section does not affect the right of a person to waive, release, disclaim, or renounce property under any other statute or the common law, or as provided in the creating instrument.

AB1038,11,6 (b) Any disclaimer that meets the requirements of section 2518 of the Internal Revenue Code, or the requirements of any other federal law relating to disclaimers, constitutes an effective disclaimer under this section or s. 854.13.

AB1038,11,9 (12) Construction of effective date. In this section, the effective date of a transfer under an inter vivos governing instrument is the date on which the transfer is a completed gift for federal gift tax purposes.

AB1038, s. 10 Section 10. 701.06 (6) of the statutes is renumbered 701.06 (6) (a).

AB1038, s. 11 Section 11. 701.06 (6) (b), (c) and (d) of the statutes are created to read:

AB1038,11,13 701.06 (6) (b) A beneficiary of a trust may not be considered a settlor solely because of a lapse, waiver, or release of any of the following:

AB1038,11,14 1. A power described under par. (c).

AB1038,11,17 2. The beneficiary's right to withdraw part of the trust property, to the extent that the value of the property affected by the lapse, waiver, or release in any year does not exceed the greater of the amount in:

AB1038,11,18 a. Section 2041 (b) (2) or 2514 (e), Internal Revenue Code of 1986.

AB1038,11,19 b. Section 2503 (b), Internal Revenue Code of 1986.

AB1038,11,24 (c) A beneficiary of a trust is not a settlor, has not made a voluntary or involuntary transfer of the beneficiary's interest in the trust, or does not have the power to make a voluntary or involuntary transfer of the beneficiary's interest in the trust solely because the beneficiary holds or exercises, in any capacity, any of the following:

AB1038,12,2 1. A presently exercisable power to consume, invade, appropriate, or distribute property to or for the benefit of the beneficiary if the power is any of the following:

AB1038,12,4 a. Exercisable only on consent of another person holding an interest adverse to the beneficiary's interest.

AB1038,12,6 b. Limited by an ascertainable standard, such as health, education, support, or maintenance of the beneficiary.

AB1038,12,9 2. A presently exercisable power to appoint any property of the trust to or for the benefit of a person other than the beneficiary, a creditor of the beneficiary, the beneficiary's estate, or a creditor of the beneficiary's estate.

AB1038,12,10 3. A testamentary power of appointment.

AB1038,12,11 4. A presently exercisable right described in par. (b) 2.

AB1038,12,13 (d) A beneficiary of a trust is not a settlor solely because the beneficiary is entitled to nondiscretionary distributions from the trust.

AB1038, s. 12 Section 12. 701.06 (7) of the statutes is amended to read:

AB1038,12,17 701.06 (7) Subsequent modification of court's order. Any order entered by a court under sub. (4), (5) or (6) (a) is subject to modification upon application of an interested person.

AB1038, s. 13 Section 13. 701.06 (8) of the statutes is amended to read:

AB1038,12,20 701.06 (8) Exempt assets. Assets of a trust, to the extent they are exempt from claims of creditors under other statutes, shall not be subject to sub. (4), (5), or (6) (a).

AB1038, s. 14 Section 14. 701.115 (1) of the statutes is renumbered 701.115 (1) (b).

AB1038, s. 15 Section 15. 701.115 (1) (a) of the statutes is created to read:

AB1038,13,2 701.115 (1) (a) In par. (b), "revocable trust" means a trust that the grantor, at the time of death, was alone empowered to change or revoke, by law or under the instrument creating the trust, regardless of whether the grantor then had the capacity to exercise the power.

AB1038, s. 16 Section 16. 701.115 (2) of the statutes is amended to read:

AB1038,13,4 701.115 (2) Survivorship under sub. (1) (b) is governed by s. 854.03.

AB1038, s. 17 Section 17. 701.115 (3) of the statutes is amended to read:

AB1038,13,7 701.115 (3) The rights of the issue of a predeceasing beneficiary under sub. (1) (b) are governed by s. 854.06.

AB1038, s. 18 Section 18. 701.19 (10) of the statutes is repealed and recreated to read:

AB1038,13,11 701.19 (10) Restriction on exercise of powers. (a) Except as provided in par. (c), a person may not exercise any of the following powers conferred upon him or her in his or her capacity as trustee:

AB1038,13,14 1. The power to make discretionary distributions of trust principal or income if the distributions are to himself or herself or for the discharge of his or her legal obligations.

AB1038,13,16 2. The power to make discretionary allocations of receipts or expenses as between principal and income if the allocations are in his or her favor.

AB1038,13,22 (b) If a power under par. (a) is conferred upon more than one person as trustee, a person who is not disqualified to act under par. (a) may exercise the power for the benefit of the person who is disqualified to act, unless the creating instrument expressly provides otherwise. A special trustee appointed by a court may exercise a power under par. (a) for the benefit of the disqualified person if no other trustee is qualified to exercise the power.

AB1038,13,23 (c) Paragraph (a) does not apply if any of the following applies:

AB1038,13,25 1. The person is also the settlor of the trust, and the trust may be revoked or amended by the settlor.

AB1038,14,5 2. The terms of the creating instrument specifically limit the scope of the power to expenditures and distributions of income or principal on the basis of an ascertainable standard relating to the person's health, maintenance, support, or education such that the person would not be subject to tax under section 2041 or 2514 of the Internal Revenue Code as a result of having or exercising the power.

AB1038,14,8 3. The person is the spouse, widow, or widower of the settlor of the trust, and a marital deduction has been allowed for federal gift or estate tax purposes with respect to the trust property that is subject to the power.

AB1038,14,10 4. The creating instrument negates the application of par. (a) with respect to the power or indicates that provisions that are similar to par. (a) do not apply.

AB1038,14,11 (d) Section 701.24 (3) governs the applicability of this statute.

AB1038, s. 19 Section 19. 701.20 (5) (c) of the statutes, as affected by 2005 Wisconsin Act 10, is amended to read:

AB1038,14,22 701.20 (5) (c) A fiduciary shall distribute to a beneficiary, including a trustee, who receives a pecuniary amount not determined by a pecuniary formula interest at the legal rate set forth in s. 138.04 on any unpaid portion of the pecuniary amount for the period commencing one year after the decedent's death or after the income interest in the trust ends. The interest under this paragraph shall be distributed from net income determined under par. (b) or from principal to the extent that net income is insufficient. For purposes of this paragraph, the deferred marital property elective share amount elected by a surviving spouse under s. 861.02 (1) is a bequest of a specific amount of money not determined by a pecuniary formula.

AB1038, s. 20 Section 20. 701.24 (title) and (1) of the statutes, as affected by 2005 Wisconsin Act 10, are amended to read:

AB1038,15,7 701.24 (title) Applicability of ss. 701.01 to 701.23. (1) Except as otherwise provided in sub. (3) and s. 701.19 (9) (a) and (10), ss. 701.01 to 701.19, 701.21, 701.22, and 701.23 are applicable to a trust existing on July 1, 1971, as well as a trust created after such date, and shall govern trustees acting under such trusts. If application of any provision of ss. 701.01 to 701.19, 701.21, 701.22 , and 701.23 to a trust in existence on August 1, 1971, is unconstitutional, it shall not affect application of the provision to a trust created after that date.

AB1038, s. 21 Section 21. 701.24 (3) of the statutes is created to read:

AB1038,15,15 701.24 (3) Sections 701.06 (6) (b), (c), and (d) and 701.19 (10) are applicable to a trust existing on the effective date of this subsection .... [revisor inserts date], as well as a trust created after that date, and shall govern trustees acting under such trusts. If application of any provision of s. 701.06 (6) (b), (c), or (d) or 701.19 (10) to a trust in existence on the effective date of this subsection .... [revisor inserts date], is unconstitutional, it shall not affect application of the provision to a trust created after that date.

AB1038, s. 22 Section 22. 701.26 (title) of the statutes is amended to read:

AB1038,15,17 701.26 (title) Disclaimers of nonprobate transfers at death.

AB1038, s. 23 Section 23. 701.26 of the statutes is renumbered 701.26 (1) and amended to read:

AB1038,15,21 701.26 (1) A person recipient may disclaim, under s. 854.13, any of the following:

AB1038,15,23 (a) An All or part of an interest in a joint tenancy, upon the death of another joint tenant.

AB1038,15,25 (b) An All or part of an interest in survivorship marital property, upon the death of the other spouse.

AB1038,16,2 (c) An All or part of an interest that is created by a nontestamentary instrument and transferred at death, upon the death that causes the transfer.

AB1038, s. 24 Section 24. 701.26 (1) (d) of the statutes is created to read:

AB1038,16,5 701.26 (1) (d) All or part of any other interest transferred under a governing instrument, as defined in s. 854.01 (2).

AB1038, s. 25 Section 25. 701.26 (2) of the statutes is created to read:

AB1038,16,8 701.26 (2) A recipient may disclaim, under s. 700.27, all or part of any interest transferred under an inter vivos governing instrument, as defined in s. 700.27 (1) (c).

AB1038, s. 26 Section 26. 702.03 (1) of the statutes is amended to read:

AB1038,16,17 702.03 (1) Unless the person who executed it had a contrary intention is found, if a governing instrument, as defined in s. 854.01, creating (2), or an inter vivos governing instrument, as defined in s. 700.27 (1) (c), creates a power of appointment that expressly requires that the power be exercised by any type of reference to the power or its source, it is presumed that the donor's intention in requiring the reference was is presumed to be to prevent an inadvertent exercise of the power. Extrinsic evidence, as defined in s. 854.01 (1), may be used to show contrary construe the intent.

AB1038, s. 27 Section 27. 702.08 of the statutes is amended to read:

AB1038,16,20 702.08 Disclaimer of powers. The donee of any power may disclaim all or part of the power as provided under s. 700.27 or 854.13.

AB1038, s. 28 Section 28. 705.04 (2) of the statutes is renumbered 705.04 (2) (intro.) and amended to read:

AB1038,17,3 705.04 (2) (intro.) If the account is a P.O.D. account, on the death of the original payee or the survivor of 2 or more original payees, any sums remaining on deposit belong to the P.O.D. beneficiaries if surviving, or to the survivor of them if one or more die before the original payee. Payment may be made to a minor P.O.D. beneficiary, however, only in accordance with a procedure approved in ch. 880. all of the following apply:

AB1038,17,7 (b) If there are 2 or more P.O.D. beneficiaries and they all survive, they shall be are entitled to payment of the sums on deposit in accordance with such any written instructions as may have been that the owner filed with the financial institution, and or, if none the owner left no written instructions, to payment in equal shares. There

AB1038,17,11 (c) If 2 or more persons succeed to ownership of the account, there is no further right of survivorship in the event of the death of one of 2 or more P.O.D. beneficiaries after their entitlement to payment has matured unless the terms of the account expressly provide for survivorship or for the account's continuance as a joint account.

AB1038, s. 29 Section 29. 705.04 (2) (a) of the statutes is created to read:

AB1038,17,14 705.04 (2) (a) If there is one P.O.D. beneficiary and he or she survives, he or she is entitled to payment of all sums remaining on deposit.

AB1038, s. 30 Section 30. 705.04 (2) (d) of the statutes is created to read:

AB1038,17,20 705.04 (2) (d) Subject to the rights of financial institutions under s. 705.06 (1) (c), if any P.O.D. beneficiary predeceases the original payee or the survivor of 2 or more original payees, the amount to which the predeceased P.O.D. beneficiary would have been entitled passes to any of his or her issue who would take under s. 854.06 (3).

AB1038, s. 31 Section 31. 705.04 (2) (e) of the statutes is created to read:

AB1038,17,25 705.04 (2) (e) If no P.O.D. beneficiary or predeceased P.O.D. beneficiary's issue who would take under s. 854.06 (3) survives the death of all owners, the account belongs to the estate of the deceased sole owner or the estate of the last to die of multiple owners.

AB1038, s. 32 Section 32. 705.04 (2) (f) and (g) of the statutes are created to read:

AB1038,18,3 705.04 (2) (f) Payment may be made to a minor P.O.D. beneficiary only in accordance with a procedure approved under ch. 880.

AB1038,18,6 (g) If the P.O.D. account is a marital account, this section applies only to the 50 percent of the account not owned by the surviving spouse named as a party on the account.

AB1038, s. 33 Section 33. 705.06 (1) (c) of the statutes is amended to read:

AB1038,18,20 705.06 (1) (c) Any sums in a P.O.D. account may be paid, on request, to the P.O.D. beneficiary upon presentation to the financial institution of proof of death showing that the P.O.D. beneficiary survived all persons named as original payees of the account. If more than one P.O.D. beneficiary is named and at least one of them is predeceased, sums in the account may be paid to the surviving P.O.D. beneficiary or beneficiaries upon presentation of proof of death of the other beneficiary, without regard to claims by the issue of a predeceased beneficiary under s. 705.04 (2) (d). If none of the named beneficiaries survive, the sums in the account may be paid to the estate of the deceased sole owner or the estate of the owner who was the last to die of multiple owners, without regard to claims by the issue of a predeceased beneficiary under s. 705.04 (2) (d). If the P.O.D. account is a marital account, this paragraph applies only to the 50 percent of the account not owned by the surviving spouse named as a party on the account.

AB1038, s. 34 Section 34. 705.06 (2) of the statutes is amended to read:

AB1038,19,5 705.06 (2) Payment made under this subchapter discharges the financial institution from all claims for amounts so withdrawn. If the institution has reason to believe that a dispute exists as to the rights of the parties to an account or their successors it may, but shall not be required to, refuse to pay funds in the account to any persons pending instructions from a court, or it may pay the proceeds to a court. An institution may but need not recognize the authority of an agent, other than one with continuing authority under s. 705.05 (3), until it knows of the fact of death or adjudication of incompetence of all parties appointing such agent and has reasonable opportunity to act.

AB1038,19,8 (3) The protection provided by this section shall have no bearing on the rights of parties or their successors in disputes concerning the beneficial ownership of funds in or withdrawn from an account.

AB1038, s. 35 Section 35. 705.20 (4) of the statutes is created to read:

AB1038,19,12 705.20 (4) A transfer under this section does not require confirmation in any procedure under s. 867.01, 867.02, or 867.03 or ch. 856 or 865. A transfer under this section may be confirmed under s. 867.046 (1m) or (2).

AB1038, s. 36 Section 36. 705.27 of the statutes is amended to read:

AB1038,20,2 705.27 Ownership on death of owner. On Subject to the rights of the registering entity under s. 705.28 (2m), on the death of a sole owner or the last to die of multiple owners, ownership of securities registered in beneficiary form passes to the beneficiary or beneficiaries who survive all owners and to any predeceased beneficiary's issue who would take under s. 854.06 (3). On proof of death of all owners and compliance with any applicable requirements of the registering entity, a security registered in beneficiary form may be reregistered in the name of the beneficiary or beneficiaries who survive the death of all owners successors to the ownership interest. Until division of the security after the death of all owners, multiple beneficiaries surviving the death of all owners successors to the ownership interest hold their interests as tenants in common. If no beneficiary or predeceased beneficiary's issue who would take under s. 854.06 (3) survives the death of all owners, the security belongs to the estate of the deceased sole owner or the estate of the last to die of multiple owners.

AB1038, s. 37 Section 37. 705.28 (2m) of the statutes is created to read:

AB1038,20,13 705.28 (2m) If more than one beneficiary is named and at least one beneficiary is predeceased, a security registered in beneficiary form may be reregistered in the name of the surviving beneficiary with a proof of death of the other beneficiary, without regard to claims by the issue of a predeceased beneficiary under s. 705.27 unless the registering entity receives written notice of a claim under sub. (3) (b). If none of the beneficiaries survive, a security registered in beneficiary form may be reregistered in the name of the estate of the deceased sole owner or the estate of the owner who was last to die of multiple owners, without regard to claims by the issue of a predeceased beneficiary under s. 705.27 unless the registering entity receives written notice of a claim under sub. (3) (b).

AB1038, s. 38 Section 38. 705.28 (3) of the statutes is renumbered 705.28 (3) (a) and amended to read:

AB1038,20,22 705.28 (3) (a) A Subject to par. (b), a registering entity is discharged from all claims to a security by the estate, creditors, heirs or devisees of the deceased owner if it registers a transfer of a security in accordance with s. 705.27 and does so in good faith reliance on the registration, on ss. 705.21 to 705.30, and on information provided to it by affidavit of the personal representative of the deceased owner, or by the surviving beneficiary or by the surviving beneficiary's representatives, or other information available to the registering entity.